How to out-bid the competition at auction

Have you ever really, really wanted something on an online auction site? You’ve set a reminder on your phone, stayed up late to watch the clock tick down and ignored health palpitations – in the hope that vintage LEGO® is yours. You’ve walked the fine line between eternal happiness and devastation.

Buying a house at auction is like that, times a million.

Auctions are exciting – and stressful – as heck. Imagine every person there has fallen in love with the same house as you, but don’t they know it’s your future home?

With emotions running this hot, it can be hard to stay in control. Follow our tips on buying a house and outsmart the pressure of auction day.

Make sure you’ve done your background checks.

You should be able to head into the auction with a clear, informed idea of how much the property is worth. Don’t take the agent’s word for it – their job is to get the highest possible price for the vendor. Get out there and see for yourself. Check out recent sales in the area. Invest in property and suburb reports to understand median prices and the changing market. Ask the agent how many contracts have been distributed to get a sense of demand.

The more information you have, the more confident you can be in making a h2 bid without overpaying.

Write this on your own face: stick to budget.

Going over budget is the biggest risk facing potential buyers. As the price creeps up, it’s easy to think, “What’s another $1000?” But small increments add up and what seems like a necessary emotional win could seriously throw out your finances for the next twenty years.

Getting pre-approval from your lender is a great way to set a clear ceiling. Write it down if you have to. You might even set two budgets, so you can satisfy the emotional need to make one more bid: your limit, and your actual limit.

You’ve done your research (see above), so you know how much the house is worth. Maybe you’re prepared to pay a little more just because you love it. After that, you’re done. Stop. Have a drink of water. Scroll your news feed. Walk away. If it helps, bring someone with you and ask them to stomp on your foot when you’ve reached your limit.

Desensitise yourself.

If you haven’t been to an auction before, it’s not a bad idea to head along for a practice run. The atmosphere can feel like being charged at by expensive rhinos in pressed suits. Pick a couple of upcoming auctions in your chosen area and see how they unfold – so you’ll know what to expect when the pressure is on.

Go in with a game plan.

What kind of bidder do you want to be? If you’ve been to an auction before, you’ll know the different types and their strategies. Have an idea of your approach before you go in. Will you make an eager first bid to get it started? Will you hang back and wait until the last moment to strike? Or will you nervously shriek a sky-high number when things get moving?

Don’t be sucked in by expensive FOMO.

Yes, this property has that exact lemon tree you remember from your childhood. Yes, the air smells like a grandmother’s heart-shaped biscuits. But if you don’t get this place, there will be another. You’ll fall in love again and it might even be better than before. Don’t let a fantasy be a burden on your bank balance. It’s okay to walk away.

Go bold (and go home).

You want other bidders to know you’re serious without showing them your hand. Don’t let the auctioneer railroad you. Bid at increments you’re comfortable with: bigger ones can scare away other buyers, while going smaller than what’s called for can slow it all down. Take a moment to consider your options if you need to – the agent isn’t going to call it quickly if they think there’s still money to be made.

Even the way you make your bids can be a psychological tactic. A nod of the head, a rolled floorplan slightly raised, holding a white dove aloft. The way you present yourself can have an impact on other buyers and your own confidence.

Consider hiring a pro.

If you’re truly concerned you’ll go over budget and maybe cry loudly, you can hire an advocate to bid on your behalf. They’ll follow strict instructions and won’t crumble under the emotional weight of missing out.

There’s little doubt buying a house at auction is a potential minefield of risks and feelings. It can also be an exhilarating beginning. Talk to an ME Mobile Banking Manager about pre-approval before you start, and head into the arena with confidence.